In this episode of MarketFoolery, Chris Hill chats with Fawn Weaver, CEO and co-founder of Uncle Nearest Premium Whiskey, about one of America's most recognized whiskey brands. Discover the true story of the man behind the iconic whiskey and how his legacy is being preserved through Uncle Nearest. Fawn also talks about her company, its operations, its future direction, and much more.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Stock Advisor returns as of 2/1/20
This video was recorded on August 5, 2020.
Chris Hill: It's Wednesday, August 5th. Welcome to MarketFoolery. I'm Chris Hill, thanks for listening. Let me start with a quick programming note. It is a short week here at MarketFoolery. As I said on Monday, I'm actually away this week, so this is going to be the last episode for this week. And if you're thinking, Hey, what am I supposed to do on Thursday? What about Industry Focus? What about Rule Breaker Investing with David Gardner? What about Motley Fool Answers, closing in on its 300th episode of all time? By all means, if you haven't already, check out some of the other podcasts from The Motley Fool.
With that out of the way, let me talk about today's episode. And I'll start here. You don't have to be a whiskey drinker to know the name Jack Daniel's. You don't even need to be someone who drinks alcohol of any kind to know the name Jack Daniel's. It's an iconic American brand. And the history of that brand has been, in my mind, enriched, because of the relatively recent discovery of a man known as Uncle Nearest. The story is much better told by Fawn Weaver. She is an investor, an entrepreneur, and she's written a couple of best-selling books about having a happy marriage. When she saw a news story about Uncle Nearest, it set her on a path to her current job as CEO of the fastest-growing whiskey company in America.
I got the chance to talk with her a couple of weeks ago, so here's that conversation, starting with Fawn talking about where she was when she saw a brief story in The New York Times about Uncle Nearest.
Fawn Weaver: So, I was in Singapore, and it was on the cover of The New York Times International Edition, journalist Clay Risen had written a piece that he describes wonderfully as a lobe. Meaning there was only so much information he was able to gather through his one trip to Lynchburg, and then spending time trying to do this work from New York. And it became very clear to him that the story needed to be told, but he wasn't going to have the time or resources to really dive into the story. And I have to tell you, he was right, because I had to hire, I think it's 18, 19 archaeologists, genealogists, historians, conservators and literally pull documents from six different states, thousands and thousands of documents, to really be able to not just piece the story together, but to be able to prove the story.
But I will tell you what brought me to Lynchburg was not this story about whiskey, it was not this story about Jack Daniel as a grown man, and in Lynchburg they called him Uncle Jack. And the most-respected men that would've walked down the street during that time were named Uncle Jack and Uncle Nearest. So, Nathan Green, we know that as his legal name, but what we also know is, he was an enslaved man. And formerly enslaved people, a lot of times, following slavery, chose to go by a different name. And that had to do with the fact that a lot of them were named after their slave owners or their slave owner's children.
The largest slave owner in this area was named Nathan, and, yes. [laughs] And so, you kind of look at it and say, all right, there is a really good chance that he did not want the same name as Nathan Bedford Forrest who was trading over 1,000 slaves a year. And so, there is a really good chance. But what we know is, when Uncle Nearest and Uncle Jack walked through town, it was nothing but respect.
And as I began diving through this story -- I write books, as you mentioned, about love, I don't intend on changing that, people keep asking me to write books on business. And like, I thought about 45 I can refer you to, I love them all, but what I can refer you to is books on love written by powerful women. That I have to do right by my side. [laughs]
But what really drew me to this story were two things. The first is, if you look at that original New York Times article, there is a photo that was prominent in the article itself. And it was a picture of Jack Daniel with his crew. It's the only known picture that Jack ever took with his crew. But if you look closely at the photo, people notice that there is an African-American to his right, which in-and-of-itself, taken in the early 1900s, about 1904, that already would have been extraordinary. But if you really zoom-in on that photo and you look, you'll notice that Jack Daniel, the most famous American whiskey maker of all time, has ceded the center position to the Black man. That is astounding. Jack is off-center, Nearis Green's son who's at the center of this picture with his crew.
And so, I knew that this story had to have been about more than just an African-American taught Jack Daniel. You don't cede center position to someone's son if all they were to you was a teacher. And so, that was the first thing that drew me in.
The second thing that drew me in, is I've bought Jack Daniel's biography, 1967, written at the height of the civil rights era. So, if you know anything about what was going on here in '65 and '66 when it was being written, and '67 when it was published, it was not a pretty time in civil rights history, especially in the South. And so, you have this biography written by a White reporter from Tuscaloosa, Alabama, that comes to a town called Lynchburg, Tennessee [laughs] to write the authoritative biography on the most famous White whiskey maker. And he includes Nearis Green and his boys 50 times in a biography this thick. Every single person who the biographer was speaking to were Jack's nephew who took over the distillery and then his children, Jack's great nephews, the four of them, that then took over after their father. And so, you're talking to the people who knew Jack the best, who knew him the most. And they included Nearest and his boys more times than Jack's own family. So, what that said to me was this story was not just about whiskey or a whiskey maker, this story was in part about an African-American elder and a White orphan, who not only he taught, but who developed this incredible relationship and mentorship.
But then, following the Civil War, when Jack Daniel decided to take the distillery he had been working at alongside Nearis Green to buy that distillery, to rename it Jack Daniel Distillery and he asked for Nearis to be his first master distiller.
And so, the story I was chasing when I came to Lynchburg was a story of love, and it's the story I found when I got here.
Hill: So, at what point in this process, because I know you went into this, and pretty quickly in the process you're thinking, I'm writing another book about love, it's just different from what I've written before, at what point in that process do you decide to put the book idea aside for the moment and say, actually, I think I want to start a distillery?
Weaver: I didn't put the book idea aside, I was very much still writing it, but the home on our bottle; anyone who looks at an Uncle Nearest bottle, there is a home on there. That is the home where Jack Daniel grew up, that home sits on a 313-acre property that we own where the original Distillery No. 7 in district No. 4 sat. And Nearis Green is the only known master distiller for Distillery No. 7. And so, you have this property that I have been in town for less than an hour, at the library, doing research, before Jack Daniel's eldest descendant walks through the door and offers her help. Because very quickly on, word got around that The New York Times' best-selling Black woman [laughs] from Los Angeles was in town and writing on this story of this enslaved man teaching Jack Daniel.
You have to remember, if you go back to 2016, if you look at any of the articles that were written after Clay's piece. Clay's piece was not negative in the least, Clay's piece simply said, until now we have known a White preacher and distiller as Jack's teacher, however, it's more likely that it was actually this African-American -- this enslaved man, who worked on the property of this preacher alongside Jack Daniel, who also was working as a chore boy.
And so, if you think about it, if I show up in town, why would you think a Black woman from Los Angeles was looking for a story of love? I mean, it doesn't even seem plausible, but that is why I was there. And so, the eldest descendant gets called to the library, once a librarian calls and says, hey, there's somebody here doing research on your family. [laughs]
And she comes down and I could see in her eyes, I could see in her face, and for very good reason, a concern. And I looked her in the eyes and I said, I am not here to harm your family's legacy. I believe that the press and social media have this story wrong. And I believe that, and I listed all the reasons I believed that. Most of it comes from Jack's own biography. I said, if he wanted to hide a person or steal a recipe or ... this is the worst place to document all that. [laughs]
And so, I told his eldest descendant, I said, listen, if I do the research and I discover that Jack is not who I believed he is, and if I discover that this was not a story of love, honor and respect, as I believe that it is, someone will come down here and pull the same, exact research as me, nothing that happens in the dark ever stays in the dark, it always comes to light. I said, however, you have my word it will not be written by me, that is not why I'm here. And so, she said to me, in that case, I want to help you. And she pulls out her cellphone and she gives me the names and numbers of Nearis Green's descendants. They grew up together. They ate around the dinner table together. They were still friends. And the last thing she said after giving me names and numbers and offering to help, before she leaves out of the library, she said, hey, you know that farm that you read about in Jack's biography, you realize it's for sale. Of course, I did not, why would I think a property 150 years with a house still standing. No, absolutely not, I didn't know it was for sale.
And so, the long answer to your short question is, the person who she then connected me with to take me to the home was her cousin Sherrie Moore, and Sherrie Moore had been in the family business her entire life. And when she retired from the family business, Jack Daniel's Distillery, after 31 years, she was their head of whiskey operation. And as we began diving more and more into this research, and I was sharing with them information I found out about their family, which matched the story that I believed I was going to find here in Lynchburg, then one day she says to me, you know, if you ever decide to honor Nearis with a bottle, I will come out of retirement to make sure you get it right.
And not long after that, I was meeting with about 40 or 50 of Nearis' descendants and I said what is the one thing you think should happen in order to honor your ancestor? And they said, we think that his name should be on a bottle, he deserves to have his own bottle. And I literally called Sherrie after that meeting and said, listen, if you will come out of retirement, I will raise the money. And that's how Uncle Nearest got started.
Hill: It's amazing, in part because of the reaction from the people that -- if you're just looking at the story in terms of sides, you can look at, well, there's the Jack Daniel's side, there are the people on that side. And the reaction is amazing for a couple of reasons, but one of them is, it reminds me of, in sort of the early 1990s when the Small Batch Bourbon craze, for lack of a better term, started to get going, yet Booker Noe, the grandson of Jim Beam. Jim Beam really started with their Small Batch Bourbons. There was this sense that all of the distilleries in Kentucky, while they compete with one another, were also all working together, there was a collegiality about this endeavor, because they saw it as a way to grow this segment. And that was one of the things I was thinking of when I was reading about, sort of, the reaction from some of the folks on Jack Daniel's side of this equation. Because they saw it as a way to, sort of, embrace the history, you know, because let's face it, there's a version [laughs] of this story where that's not the reaction, there's a version of this story, where the librarian calls and someone comes into the library to cause trouble of some sort.
Weaver: Yeah, absolutely. And the thing that I love about this story the most is, beside the fact that it's absolutely true, is the only reason we know who Nearis Green is; people give me so much credit, and I always try to shift that credit, because, yes, I did the digging, but you have to understand that the only reason we know who Nearis Green was is because Jack took the time to honor him while Jack was alive. And then Jack's nephew, Lem, took the time to continue honoring Nearis and his children when he was alive, and every generation. So, that's the only reason that we know. It isn't that I was able to just dig, dig, dig and find Nearis Green was the first master distiller and show a document that no one had seen, they have gone on record enough times [laughs] that it was very clear they wanted to make sure people knew who was Jack's first master distiller, who taught him, who was his mentor, that's extraordinary.
Because if you go up to the folks in Kentucky, and God bless them, I love all of them, I work side-by-side with them, but they all had African-Americans at their distilleries in the beginning; name one of them. And so, the only reason that we're able to honor Nearis Green as the first known African-American master distiller is because Jack named him. And I think that's remarkable.
Hill: I want to talk a little bit about the business that you have started. And let's just start with where we are right now in this pandemic with COVID-19, how are your employees holding up and what has it done to the production side of your business?
Weaver: Our employees are holding up fantastic. On the production side, we've ramped up. [laughs] We have been selling like crazy. And so, there is no time to slow that process down. And so, we lay down anywhere between 4,000 and 7,000 barrels a year. That is not changing this year because of how crazy it is out there. And our team, you know, we made a decision very early on, and we began having weekly video calls with the entire company. And those calls were really, you could have just called them hope calls. The entire conversation, we never talked about what challenges were going on in the field, what challenges were in our industry, we didn't care. The only thing that we talked about was our ability to not lose heart and our ability to overcome any challenge, and that we had the team to do it. And the team believed it 100%.
And so, even though we work from home, shelter-in-place, two months straight. Not one person left the house unless they were going to the grocery store. I did not allow one person into the field during that period of time. And when we closed out each of the Q1 and Q2. When we closed out Q1, because we -- on-premise basically shut down in March of this year. So, on-premise, the restaurants, the bars. And so, when you have something like that happen, you automatically think, my God! This is about to start tanking.
And when we closed out Q1, it was our six quarter in a row of triple-digit gains. I don't know many industries where you can just go quarter-over-quarter triple-digit gains. And so, I remember that earnings report going out to our investors and them going, oh, boy! I guess that's going to stop for Q2, like, we're not going to be able to see this again. And Q2 was our seventh quarter in a row of triple-digit gains. And so, I think the thing that we have to understand about American whiskey is it is a native spirit, and it is what people are going to drink whether high or low, good times or bad times. And if we embrace that, which we have, and understand that, yes, who's drinking it may change over this period of time, but there's still somebody who's going to want to drink American whiskey, then you're able to just keep pivoting. So, I can say that we have pivoted as an industry multiple times during this coronavirus, but this industry is solid and it's doing incredibly well.
Hill: It's amazing growth. And I should just point out for those watching and listening, Uncle Nearest, the fastest-growing independent whisky brand in U.S. history, all the more impressive to me because of the aging process. You know, good vodka takes a lot less time to make [laughs] than good whiskey. Which leads me to this. When you decide to go down the avenue of starting a distillery, honoring Uncle Nearest by putting him on a bottle, was there any pushback from people you went to talk to, or was the story so great that you were beating off investors with a stick?
Weaver: Oh, yeah, beating off investors with a stick is for sure, [laughs] still to this day. And so, folks will ask me, how do I set my valuation? Because I get so many incoming investor requests. And so, C Series, I set a valuation and said, this is where we are, and Series A, Series B, same thing. And after each series, when I'd get incoming, I'd say, this is my next number. When I hit that number, I'll let you know, then I'll open up another round. And so, we've done it a little different than, I think, most.
The interesting thing about coming into this industry is one that people may or may not expect, the greatest challenge that I would say my team faced is, I hired an executive team of all women. Now, they're the best of the best in their fields, and I wasn't looking for women, it just so happens that the best of the best for this brand were all women. And I remember my SVP of Global Sales, [Kate Jerkens] and my Head of Whiskey Operation, [Sherrie Moore] Sherrie Moore and Kate Jerkens, when we were beginning this, we all had a conversation one day and realized we were having the exact same problem. And that problem was, we couldn't get calls back. So, we knew that we needed to be able to source a whiskey in Tennessee that was aged and that was still being made the way that Nearis made it. There were only so many that were doing that. We were going to need to buy bottles and corks and have a co-packer and all the rest of the stuff before we had our own distillery. We knew we needed help.
We couldn't get any calls back. So, I called my husband who's an Executive Vice President at Sony Pictures. So, all you have to do is Google him and know he's busy. I called him and said, babe, so we have just discovered that we are getting no phone calls back and everyone we're calling are men, we're thinking it may be a coincidence, but could you just test this theory out for me. And so, we all sent him the names and numbers of the people along with a brief synopsis of what we needed him to know before calling that person. And in every single instance, people that we have been waiting for call us back for weeks, got back to him in five minutes or took the call.
And the calls would also, by the end of it would go, hey, do you drink beer, you want to meet at a bar, do you golf, you want to meet on the course? And so for, I know, a lot of women that's bothersome, for me, I looked at it as less work, because [laughs] if I can turn over some of these calls to him and he could make a very quick phone call and get it done, that allowed me to focus on other things.
And so, for the first year-and-a-half, maybe two years, if you look at any interview that I ever did, you will never see me referenced as the CEO of Uncle Nearest, I'm the Chief Historian ... never, people thought he was the CEO for the first two year. And I'm like, guys, all you had to do is Google him to know he wasn't the CEO. [laughs]
Hill: I mean, get on LinkedIn, do a little bit of homework.
Weaver: [laughs] But it worked. And he calls me one day and he says, babe, we're Remington Steele. [laughs]
Hill: [laughs] I'm going to come back to the business side in just a second, but I would be remiss if I did not ask this question, and I'm but I'm not trying to intrude in your personal life, but because you have written a couple of best-selling books on having a happy marriage. What was the reaction from your husband when, as I read it in one article, you had a birthday coming up and he said, I think I want to take us to Paris because we like to travel around the world, and you said, I have an idea, let's go to Lynchburg, Tennessee instead.
Weaver: [laughs] He was not happy about the 40th birthday, and I tease him, that if something had happened to us here, then nobody would have known where to find us, because he was so embarrassed that I had chosen for my 40th birthday to go to a little town called Lynchburg in Tennessee, that he told everyone he was taking me Bourbon-tasting. So, everyone would have been looking for us in Kentucky. [laughs] But, no, I mean, he's an African-American man, he's 6'4", he is a, you know, a big guy, the last place he wants to go is a town with lynch in the name. I think it's fair. And so, no, he was not interested. And he rammed through every city that he knew I loved around the world, and finally, after weeks of this, he says, OK, babe, I got it. I know you've been wanting to go to Prague, you've not been to Prague yet, everywhere else I have been. And I said, you're right, I would love to go to Prague, let's do that for my 40th birthday, but let's go by way of Lynchburg.
[laughs] And by then, my husband employs a lobbyist for a living, that's a part of his job. And he says, you know, if I could just employ you as a lobbyist, boy! Would I get a lot done, because I lobby to no end. And so, what I wanted for my 40th birthday is what I got. And that was to chase this story, even if for only four days, which was what he said was the limit. We will go for four days, [laughs] and then we're leaving.
But I have to tell you, once we got here and he met the people here, and they were amazing, wonderful people. And the way that things lined up so quickly, he was absolutely certain very early on that this was about more than whiskey. And that for whatever reason, I have been the one chosen to tell this story. And so, it was not difficult at all after that point. I mean, we bought the farm on the second day we were here. [laughs] So yeah, it wasn't hard.
Hill: The business of whiskey is very different from the time of Jack Daniel's. There are corporations, there are public companies: Diageo; Brown-Forman, which owns Jack Daniel's; Constellation Brands. What is something every investor should know before they buy shares of a spirits company?
Weaver: You know, I think you really need to know the leadership. And I don't think that's any different from any industry., I learned very early on, by losing several million dollars, to not invest in a brand or an overall industry, you invest in the person who is leading that brand. And so, you have to really look at who is leading Diageo; who is leading Brown-Forman, Lawson Whiting over there. And then you have to look at their track record of leadership, and that will tell you all you need to know, because in a moment like this, with coronavirus, we've seen a lot of people make some pretty big mistakes. And if you look into our industry, I think we have been really, really steady, overall. You've not seen too many make major decisions.
Now, for craft distilleries, which we technically fall within, I'd say a lot of them made mistakes. The moment things started going bad, they began laying off and furloughing very quickly. Well, then that makes it very difficult to get your people fired up and ready to go the moment shelter-in-place ends. And so, those leaders who decided to stick with their employees and say, listen, we are not going to make permanent decisions for temporary problems, those are the ones that I would back.
Hill: To the extent that you have a crystal ball, what does the next year or two look like for Uncle Nearest distillery? I'm assuming an eighth consecutive quarter of triple-digit growth is just 90 days away, but where do you want to take this distillery? Because there are people who get into the beverage business, whether it is alcohol, whether it's beer, wine, certainly nonalcoholic beverages, and their end goal is to sell to someone enormous, Coke, [Coca-Cola] Pepsi [PepsiCo] or Constellation Brands, or Diageo that sort of thing. What do the next couple of years look like for Uncle Nearest?
Weaver: Yeah. My goal was to not to sell to any of the big guys; it is the exact opposite of that. And a part of the reason is, is No. 1, there has never been an African-American to lead a major spirit brand, period. I would be foolish to come in and make history and to be the first and then turn it over to one of the big guys, because in case you hadn't noticed, all of the big guys are White male. And so, then we no longer have [laughs] someone in that place.
But for Uncle Nearest, you mentioned it earlier, it's the fastest-growing independent American whiskey brand in U.S. history. I'm not content with being the fastest-growing American whiskey brand, I want to be the fastest-growing American premium spirit of all times. And the only one who has beat us, at this point in their lifespan, is Casamigos, that's who we're going after, not because they're not fantastic, but because they're tequila, and American whiskey is the native spirit, and that is who should have the record in America, and that's what we're going to do.
Hill: Last question before I let you go, and I appreciate your time because I can only guess at how busy you are particularly during this time. I have been to the Uncle Nearest website, I have a bottle of the 1856 on its way to my home. How would you recommend I enjoy it?
Weaver: Oh, gosh, it depends. You already said that you love whiskey, right?
Weaver: Okay. Well, Uncle Nearest is the most awarded American whiskey of 2019, so far of 2020, I say enjoy it neat, because the world has given it every double gold there is, the World's Best Tennessee Whiskey, if you go across the spectrum and just look for what whiskey ranked best, best, best, best, 90 top awards in two years. So, I'd say, drink it neat, it's how I drink it.
Hill: Since I had that conversation with Fawn Weaver, the bottle did arrive and I cannot recommend it highly enough. If you're not a whiskey drinker, this is one of those whiskeys that makes a great gift for someone in your life who is a whiskey drinker, in part, because there's an amazing story that's a part of it.
If you want to learn more, just go to UncleNearest.com.
As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
That's going to do it for this edition of MarketFoolery. The show is mixed by Dan Boyd, I'm Chris Hill, thanks for listening, we'll be back on Monday.